China Trademark Cancellations: Strategy and Timing (Part 1 of 2)

Increasingly often, pre-application trademark searches and post-application notices from the China Trademark Office (CTMO) reveal conflicts with preexisting rights (i.e., trademark registrations or pending trademark applications). It’s not surprising, given the vast number of trademarks being filed. See China Still Has Too Many Trademarks.

But a cited conflict, whether in a search or from the CTMO examiner, isn’t necessarily the end of the road for a trademark application. Chinese trademark law and practice offer a potential solution: the non-use cancellation. In China, any trademark that has been registered for more than 3 years is vulnerable to a non-use cancellation as of three years after the registration date.

Almost every country has a use requirement for trademarks: trademarks that aren’t used in commerce for a given period of time (usually about 3 years) are deemed abandoned and may be cancelled. In the U.S., when a registered trademark is cited as a conflict, the odds are fairly high that the trademark is still in use, especially if the mark has been registered for 10 years or less. The U.S. requires the trademark owner to provide sworn proof of use at the time of registration, between 5 and 6 years after registration, and again between 9 and 10 years after registration. That doesn’t leave a large window of time for the mark to be abandoned.

Meanwhile, China has no affirmative use requirements to register, maintain, or renew a mark and many trademark applicants take advantage of this loophole to register in additional subclasses and thereby cover a wider range of goods. SeeChina Trademarks: Register in More Classes, Take Down More Counterfeit Goods. The only way that a Chinese trademark registration will be cancelled for non-use is if a third party files a non-use cancellation and the trademark owner is unable to provide proof of use in commerce during the previous three years. SeeChina Trademarks: When (and How) to Prove Use of a Mark in Commerce. Accordingly, the vast majority of Chinese trademark registrations that have been effectively abandoned are nonetheless still valid.

Determining whether to file a non-use cancellation turns on whether a conflicting trademark is actually being used in commerce. Here, the ubiquity of e-commerce in China comes in handy. With few exceptions, any product or service deemed valuable enough to protect with a trademark registration will be marketed and sold online. And a thorough Internet search will reveal the traces. And I do mean thorough: for starters, going several pages deep on search engine pages (Baidu, Bing, etc.); checking company registrations; scouring social media pages (Weibo, WeChat, etc.); and poring through e-commerce sites (Alibaba, JD.com, etc.). If you find something credible, stop – one documented use in commerce is sufficient to defend a trademark against a non-use cancellation. But much of the time, our searches reveal no evidence that the trademark was ever used.

When you file a non-use cancellation, you indicate whether you wish to cancel the entire registration, or just with respect to certain subclasses. If your goal is to eliminate an obstacle to your own trademark, a partial non-use cancellation with respect to the subclass that matters to you is sufficient – and also more likely to succeed. If you attempt to cancel an entire trademark registration, the trademark owner only needs to demonstrate use on a single item in order to defeat the non-use cancellation. Why overreach when it doesn’t gain you anything?

After you’ve done all the research and determined whether to file, it’s just matter of completing the paperwork and waiting the 9+ months to hear back from the CTMO. Sometimes you can shortcut this timeline by contacting the owner of the conflicting mark. This option is most applicable when a conflicting mark covers a number of subclasses but is not being used on any of them, and you only need coverage in one or two subclasses. You could file a cancellation against the entire mark, but the owner of the conflicting mark would undoubtedly prefer to keep some protection. If you are appealing a rejection, the cooperation would work like this: the trademark owner would provide a letter agreeing that your trademark can coexist with theirs, and in exchange you don’t file a non-use cancellation against the full registration.

In part two of this two-part series, we’ll look at the timing of non-cancellation filings in general, and in the specific case when dealing with a trademark squatter.

About China Law Blog

We will be discussing the practical aspects of Chinese law and how it impacts business there. We will be telling you what works and what does not and what you as a businessperson can do to use the law to your advantage. Our aim is to assist businesses already in China or planning to go into China, not to break new ground in legal theory or policy.